MLM - A Flawed Concept?

News Type: none — Sat Jan 28, 2006 3:35 PM EST

I often hear critics say that MLM is a fundamentally flawed business concept.

Of course they are right.

However, they shouldn't toot there horns quite yet. The reality is, every single business in the world is flawed. No business will work for everyone.

In fact, I'm flawed, you are flawed, and the world is flawed. Yet, I still live what I consider to be a pretty good life. I'll bet you do too. I have good health, a beautiful wife and great kids. I have a lot of things to be thankful for as I'm sure you do.

There are flaws in Network Marketing, but there are also some distinct advantages.

In Network Marketing, I have more control over my income than I would at a typical job.

In Network Marketing, I have less to worry about (paperwork, product distribution, employees) than I would by having a typical business.

MLM is not for everyone, but it certainly isn't any more flawed than the profession of the person that is telling you how flawed it is.

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{"commentId":15724,"authorDomain":"march"}

March

MLM is fundamentally flawed in ways that make it largely unviable. MLM often ignores simple supply/demand forces, making it harder for distributors to sell their product.

All the advantages you present could exist without the presence of uplines or downlines. However, companies stick with the MLM framework because the real money is to be made in selling distributorships, not in selling the product.

I've done a lot of research into MLM, and as an economist I feel it is entirely unworkable as a method of selling product, which is why companies with in-demand products don't use it.

You propose however that MLM is flawed because, hey, we're all flawed. Well, Hitler was flawed too. All things aren't equal, and I would stay far away from MLM schemes.

{"commentId":15724,"threadId":"25489","contentId":"73794","authorDomain":"march"}

#1 - Sun Jan 29, 2006 1:25 AM EST

{"commentId":47991,"authorDomain":"tribble"}

Ty Tribble

Mark,

You are making a huge and flawed assumption here: "...because the real money is to be made in selling distributorships, not in selling the product."

That is simply not true and the FTC makes sure of it.

Network Marketing contributes $72 Billion to the U.S. economy each year. If that is "entirely unworkable as a method of selling product", I would like to see what you consider workable.

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#2 - Fri Mar 3, 2006 5:43 PM EST

{"commentId":49121,"authorDomain":"march"}

March

Then why sell distributorships at all? For distributors, they are necessary to make real money. For the company, they are necessary to create demand... the biggest customer for these firms are those who've been suckered into the business of MLM. They are the ones who buy the products.

It doesn't matter how much network marketing contributes... it's not an efficient or desirable method of selling product. MLM doesn't exist to sell desirable products... companies create products in order to push their MLM systems.

And it's March, not Mark.

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#3 - Sat Mar 4, 2006 6:27 PM EST

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